The HCV Race: Gilead Plowing Ahead With ‘7977; Bristol Eyes First-To-Market Opportunity With All-Oral Combo In Asia

Several companies developing candidates for hepatitis C updated their plans during the recent round of quarterly earnings calls, outlining everything from strategies to be first-to-market with an all-oral combination of direct-acting antivirals to an emerging market strategy for pegylated interferon.

The news flow never seems to stop or even slow down in the furious race to produce an all-oral combination of direct-acting antivirals to treat hepatitis C, and basically every biopharmaceutical company involved in the competition addressed its plans during the recent round of fourth-quarter and full-year 2011 earnings calls, even if they had little to report.

The news ranged from more impressive data for the nucleotide polymerase inhibitor that Gilead Sciences Inc. acquired in its high-premium buyout of Pharmasset Inc. to Bristol-Myers Squibb Co.’s confidence that it may be first-to-market with an all-oral combo – albeit one targeted specifically to Asian patients – to Roche’s emerging market strategy to increase revenue from an old-school HCV drug, Pegasys (peginterferon alfa-2a). Meanwhile, Merck & Co. Inc. and Vertex Pharmaceuticals Inc., the current leaders in the space after launching new protease inhibitors last year, spoke about maintaining their positions atop the competition.

Gilead, which bought Pharmasset for nearly $11 billion last November, grabbed the headlines with the announcement that “nuc” GS-7977 (formerly PSI-7977) was showing similar efficacy in genotype 1 HCV patients as it had previously in genotype 2 and 3 patients, which generally are considered easier to treat (Also see "Gilead Goes For The Gold (Standard) In Plan To Acquire HCV Specialist Pharmasset" - Pink Sheet, 21 Nov, 2011.). Success in genotype 1 is crucial because it is the predominant strain in the U.S., which offers a significant patient base and the best opportunity for premium pricing.

On Feb. 2, Gilead reported that in its Phase II ELECTRON trial, arms testing ‘7977 as a single agent in both genotype 1 treatment-naïve patients and null responders were showing good early viral suppression data (Also see "Gilead Polymerase Inhibitor Demonstrates RVR In All ELECTRON Patients At Four Weeks" - Pink Sheet, 3 Feb, 2012.). The drug produced rapid virological response (RVR) – undetectable viral load – at four weeks of treatment in all null or naïve patients who had completed four weeks treatment at the point when the company filed a late-breaker abstract for presentation at the Conference on Retroviruses and Opportunistic Infections (CROI) in Seattle, March 5-8.

Chief Scientific Officer Norbert Bischofberger said when Gilead presents the genotype 1 data from ELECTRON at CROI, it will have four-week sustained virological response (SVR4) data from all of the null responders. “It’s important to reiterate that RVR reflects virologic response on treatment,” he cautioned. “However, the important measure of response in the accepted Phase III endpoint is SVR12, which is a sustained virological response 12 weeks after end of treatment. SVR4 [data] are a reasonable proxy for SVR12, as most patients that rebound after treatment discontinuation do so in the first four weeks.”

Sales Estimates For GS-7977 Increase Further

While preliminary, the latest ‘7977 data led some Wall Street analysts to become even more bullish on the drug’s prospects. In a Feb. 6 note, analyst Matthew Roden of UBS Investment Bank lowered his risk adjustment for ‘7977 sales forecasts from 15%-30% to 5%-25%. As such, he increased his peak sales projection to $5.8 billion in 2020, with an upside case scenario of $7 billion.

Gilead President John Milligan said the company’s current goal is to obtain FDA approval during the first half of 2014 for ‘7977 in combination with ribavirin, part of the current standard of care. It is proceeding with a Phase III study in genotype 2 and 3 patients. The company also plans to perform a drug/drug interaction study of ‘7977 in tandem with its Phase II NS5A inhibitor GS-5885. If successful, the DDI study would be followed by a small Phase II trial intended to demonstrate SVR rates for that combo in genotype 1 patients, putting the ‘7977/5885 combo about six to eight months behind development of ‘7977 with just ribavirin on the development curve, Bischofberger said.

The company also will study other internal combinations – it has seven HCV candidates in clinical development, including a pair of protease inhibitors, a pair of non-nucleoside polymerase inhibitors and a Toll-like receptor-7 agonist.

“We’re really aiming for a pan-genotypic, single-tablet, oral, once-daily regimen,” Bischofberger explained. “And that, I think, is much closer than we thought a year ago. And we have all the compounds in place internally so we can pursue that. The first one will obviously be ‘5885 or ‘7977. That will probably be genotype-1 specific. But we have other things coming behind it that have pan-genotypic potential.”

Complicating matters slightly is that, due to prior deals arranged by Pharmasset, ‘7977 also is being tested in combination with HCV candidates owned by Bristol and by Johnson & Johnson. Bristol is leading a trial testing the nuc with Phase III NS5A inhibitor daclatasvir (BMS-790052) [See Deal], while J&J’s Janssen R&D Ireland division is investigating ‘7977 with its protease inhibitor TMC-435. Bristol controls the data assembly and release from its trial, Bischofberger noted. (Bristol and Tibotec also have an agreement to test daclatasvir and ‘435 in genotype 1 HCV patients [See Deal].)

Bristol Seeks First-To-Market Edge In Genotype 1b

Bristol executives were quite bullish on their own HCV prospects during their earnings call Jan. 26. In January, the pharma announced that its proprietary combination of daclatasvir and Phase II protease inhibitor asunaprevir (BMS-650032) produced SVR12 in four of 11 genotype 1 null responders, and also that the combination, with ribavirin, achieved SVR12 in 90% of genotype 1b patients tested (Also see "Bristol-Myers Squibb Breaks Oral Hep C Treatment Barrier" - Pink Sheet, 19 Jan, 2012.).

During the call, Chief Scientific Officer Elliot Sigal predicted it will take “three major agents” to produce an effective pan-genotypic all-oral regimen for the virus. That combination likely will include a nuc, a protease inhibitor and an NS5A inhibitor, he said, asserting that daclatasvir is the leading candidate in that last class. In January, Bristol paid $2.5 billion to acquire Inhibitex Inc., which has a promising nuc (INX-189) in Phase II (Also see "HCV Buyup Continues As Bristol Offers $2.5 Billion For Inhibitex" - Pink Sheet, 9 Jan, 2012.).

“We have with our own protease inhibitor found that [an NS5A] will cure nearly all patients with genotype 1b, and that is a very important opportunity [because] that genotype is predominant in Asia and almost exclusively exists in Japan,” Sigal said. “We’re in Phase III with that. I think that may well be one of the first, if not the first, all-oral regimens that are attacking genotype 1.”

Sigal added that data from its study of daclatasvir with Gilead’s GS-7977 will be unveiled later this year at the European Association for the Study of the Liver (EASL) meeting in Barcelona, April 18-22.

During its quarterly call Feb. 1, Roche, a current HCV market leader with Pegasys and its branded version of ribavirin (Copegus), said it is awaiting results from interferon-free combo trials like those involving GS-7977 to get a read on whether peginterferon can be phased out of the standard of care. The weekly injectable is unpopular with patients and clinicians because of a bad side-effect profile, including recurrent flu-like symptoms. Pascal Soriot, chief operating officer, pharmaceuticals, said continued promising data for interferon-sparing regimens “would be a game-changer, no question.”

In the present, however, the Swiss pharma is pursuing an emerging market strategy with peginterferon to increase earnings. Roche is partnered with an Indian company for lower-cost, late-stage production of Pegasys. Meanwhile, Egypt has emerged as an important market for peginterferon, with Roche introducing a second brand called Pegferon.

“It’s a small example but Egypt is a very substantial country for us,” Soriot said. “The introduction of the second brand called Pegferon, that is targeting exclusively the public market, the government, has generated a tremendous amount of additional sales and lots of volume, and of course many more patients being treated.”

Merck Looks To Next-Generation Protease Inhibitor

In its call Feb. 2, Merck tried to paint a positive picture for protease inhibitor Victrelis (boceprevir), which earned far less in its first year than competitor Incivek (telprevir) from Vertex. While Incivek brought in $951 million during its first eight months on the market, Victrelis yielded sales of $140 million. Executive VP and President, Global Human Health, Adam Schechter stressed, however, the drug’s growth as the year went on.

“Global sales in the fourth quarter were $87 million,” he said. “In the U.S., we grew share 10 out of the last 12 weeks. We ended the quarter with approximately 36% of total prescription share. This is an overall increase of about 10 share points in the quarter.”

Schechter attributed the growth to Victrelis’ approval in 19 markets, including some ex-U.S. markets (he did not specify which) where it holds greater than 50% market share (Also see "Diabetes Franchise May Help Merck Offset Loss Of Singulair" - Pink Sheet, 2 Feb, 2012.). The New Jersey pharma also hopes to leverage significant opportunity out of its agreement with the U.S. Department of Veterans Affairs – Victrelis is the only protease inhibitor for HCV listed in the VA health care system’s formulary.

CEO Kenneth Frazier did not put as much effort into defending Victrelis, stressing instead the company’s optimism about next-generation protease inhibitor MK-5172, a pan-genotypic candidate in Phase II that he thinks can be “a very strong anchor for an all-oral therapy.”

Prospects for ‘5172 probably only grew more important Feb. 9, as Merck announced that drug/drug interaction studies for Victrelis with several HIV drugs – ritonavir-boosted protease inhibitors, including Bristol’s Reyataz (atazanavir), J&J’s Prezista (darunavir) and Abbott Laboratories Inc.’s Kaletra (lopinavir/ritonavir – showed that such drugs could see reduced effectiveness when used in combination. Both Merck and Vertex hoped to position their HCV protease inhibitors as therapy for patients co-infected with HCV and HIV.

The two remaining independent U.S. biotechs that have HCV candidates in the clinic – Idenix Pharmaceuticals Inc. and Achillion Pharmaceuticals Inc. – have not yet held or even announced dates for their quarterly calls (Also see "High-Premium Buyouts Continue In Hepatitis C Space; Are Idenix And Achillion Next?" - Pink Sheet, 16 Jan, 2012.). But Idenix had reason to celebrate Feb. 3 as the FDA lifted its partial clinical hold on Phase II nuc IDX184.

That decision will allow Idenix’s 12-week, Phase IIb study testing ‘184 in combination with ribavirin and peginterferon in genotype 1 to continue. “Importantly, this allows us to expand the Phase IIb progam and evaluate IDX184 in interferon-free regimens with other direct-acting antivirals,” said Idenix CEO Ron Renaud. “We are working toward beginning all-oral combination trials as quickly as possible.”